Every now and then I am approached by someone wanting to know if they are in any sort of obligation or agreement. One of the first things that they typically say is: “There’s nothing in writing”. What, legally, does that lack of writing do to an agreement? What if you shook hands? Would that make a difference?
The truth is there are only three kinds of agreements that MUST be in writing to be enforceable. The first one is Real Estate. You can shake hands on a deal all you want but if you are dealing with real property at all it MUST be in writing. No writing? No deal.
The second type are contracts performed outside of a year. This means that if I make an agreement to shovel your walk in the winter of 2018, seeing as that is over a year away, it must be in writing. Otherwise it is not enforceable.
The third kind of agreement that must be in writing is matters that include partial performance of the contract. So, if I am going to perform any sweat equity or have offered to perform some obligation that normally would not be considered in that type of a deal, it must be in writing. Mostly so that both sides know who is obligated to do what.
No other agreements MUST be in writing. You can still have an agreement or contract that is enforceable, it just isn’t in writing. An oral contract is still a contract that has obligations and consideration flowing from each side. If someone tries to get out of the agreement by saying it isn’t in writing and it isn’t the type of contract that is required to be in writing, that in and of itself will not relieve the person of their obligation. I do a lot of employment law and many times I hear either the employer or the employee telling me that they don’t have a contract as they don’t have anything in writing. Guess what….? You DO have a contract, just not a written one. In those types of disputes a court will look at the behavior of the parties to determine what the contract actually was and then make a decision based on that. Who would actually show up to work every day if they didn’t have some sort of a binding agreement? What employer would stroke a paycheque to someone that wasn’t in a contractual relationship with them?
While written contracts help parties understand what their duties and obligations are, they are not required in our day to day lives. That being said I think it is still wise to get as much in writing as you can just in case you need to rely on it in the future.
If you have any questions about this area of law or any other legal matter feel free to contact myself or any of my wonderful colleagues to assist you.